Perak Property Market stable in 2015

Perak Property Market stable in 2015

OVERVIEW The property market in Perak portrayed a slight moderation in 2015. There were 44,207 transactions worth RM8.31 million recorded in the review period, down by 1.3% and 4.7% in volume and value, respectively. Residehe market activity. Agricultural sub-sector ranked second with 24.6% of the market share, followed by commercial (7.3%), development land (2.3%) and industrial sub-sectors.

Market movements across the board were mixed. Development land sub-sector recorded a 24.5% increase whilst residential sub-sector saw a 4% increase, a turnaround from its 3.0% contraction in 2014. Commercial, industrial and agricultural subsectors continue to chart a downturn of 1.5%, 11.8% and 13.9%, respectively. In terms of value, residential, industrial and development land sub-sectors saw positive growth of 5.1%, 10.9% and 24.1%, respectively. However, commercial and agricultural sub-sector recorded otherwise. 

Several major sales were recorded in 2015. Amongst the prominent ones included:

Apart from that, the review period also recorded bulk purchases of more than 200 lots in Mukim Kampar, Mukim Teja and Mukim Bidor.

 

RESIDENTIAL

Residential sub-sector continued to register stable price trend across the districts with notable increases recorded in selected schemes. Houses located in established areas and adjacent to commercial center as well as nearby higher learning institutions recorded capital growth.

In Kerian District, single storey low-cost terrace saw price escalation by more than 18% due to the limited supply of houses priced RM200,000 and below. Meanwhile, single-storey terraced charted several substantial growth of 15% to 18.8% in Larut Matang District due to its good location, proximity of AEON hypermarket as well as various neighbourhood attractions.

Double-storey terrace in Meru Valley Resort (Gold View) fetched a high RM580,000 whereas prices of similar properties for other schemes were in the range of RM150,000 to RM430,000. Apart from that, prices of stratified units were largely stable with marginal increases observed in several areas. The All House Price Index for the state stood at 236.4 points as at Q4 2015, up by 7.2% over Q4 2014. Correspondingly, the All House Price increased to RM181, 175 (Q4 2015) against RM168, 955. In the residential rental market, the trend was fairly stable with substantial increases noted in selected schemes. Terraced houses located adjacent to town center, higher learning institutions as well the army camp in Larut Matang District obtained premium rentals. Rental was equally stable in high-rise segment with several movements registered in established areas served with efficient connectivity and various commercial attractions.

 

 

COMMERCIAL

In the commercial sub-sector, prices of shops were stable across the board. In the central town secondary area, double storey pre-war shops in Bandar Teluk Intan enjoyed capital increase by 20.6% due to its location and high demand. The ground floor shops rental market saw a similar stable trend with higher rentals recorded in prime locations such as in Ipoh City, Kampar town and Hilir Perak.

INDUSTRIAL

In the industrial sub-sector, prices were on the whole stable with several movements recorded in strategic areas served with good accessibility. Terraced and semi-detached factories in Forest City observed positive growth as it is located within Ipoh Industrial Corridor.

PROPERTY MARKET ACTIVITY

The primary market showed a downtrend as the number of new launches contracted in 2015 at 5, 450 units (2014: 7,988 units). Correspondingly, the response from buyers seemed slow with 2.256 units sold, indicating and overall sales performance of 41.4% (2014: 48.8%). Terraced houses formed the bulk of new launches contributing 57.5% (3,134 units). The residential overhang portrayed increasing number in the review period. The year recorded 1, 426 residential overhang units worth RM 520.1 million, rose sharply by 36.4% against 2014 (1,045 units worth RM 290.68 million).

Similarly, the unsold under construction and not constructed increased by 2.6% to 4, 359 units (2014: 4, 423 units) and 11.7% to 619 units (2014: 554 units). A similar unsold trend was observed in shops subsector. The overhang increased by more than one-fold to 961 units worth RM 413.19 million (2014: 352 units worth RM148.58 million).

Likewise the unsold under construction recorded an increase of 2.6% to 1160 units (2014: 1130 units) and not constructed rose by more than two-fold to 127 units (2014: 42 units). The overhang and the unsold situation in the industrial sub-sector were minimal. There were 21 overhang units worth RM13.41 million and 148 unsold under construction units in the year. The retail segment saw its performance moderated as the overall occupancy of shopping complexes dropped marginally to 88.2% (2014: 92.5). The sub-sector saw an annual take-up of 84,067s.m. in the review period, higher than 49,474 s.m. recorded in 2015.

There were five new completions recorded in the review period namely Pasaraya TF in Gerik, Econsave Hypermarket in Trolak, AEON Shopping Complexes in Klebang as well as AEON Big Falim and Econsave Bercham offering a total of 125,716 s.m. As at end 2015, there were 70 existing shopping complexes (948,753 s.m.) and another three buildings (20, 948 s.m.) in the incoming supply. Construction activities showed signs of a slowdown. Residential sub-sector recorded fewer completions, dropped marginally by 3.4% to 10, 531 units (2014: 10,900 units). However, starts and new building plan approvals recorded an increase of 24% (2015: 14,425 units; 2014: 11,636 units) and 15.4% (2015: 18,516 units; 2014 16,047 units), respectively.

2016 OUTLOOK

The state’s property market for the year to come is expected to be promising backed by various proposed and ongoing development projects as well as state government initiative in the supply of affordable houses and infrastructures. The setting up of Lembaga Perumahan and Hartanah Perak (LPHP) is one of the initiatives in formulating the State Housing Policy. Under the 11th Malaysia Plan (11 MP) the state government outlines 7 core thrusts for the state including acceleration of economic growth through new networks towards the realisation of ‘Perak Amanjaya and Wawasan 2020’ Development Plan. Under the Rumah Amanjaya programme, Perak will supply 10,000 affordable house units by 2018.

The state’s economic development corridor would focus on Southern Perak, based on a master plan which encompasses Batang Padang and Hilir Perak Districts involving 450,000 hectares. The main component is the Perak Eco-Industrial Hub sited on 1, 376 hectares of reclaimed land at Mukim Rungkup comprising a terminal, iron and steel integrated industry and other supporting industries. Another component is the Rungkup Terminal City covering 1,638 hectares involving a terminal, integrated sea transport facilities and mixed development projects. A Coastal Terminal and Jetty Development Corporation would be set up to develop 230 kilometres of coastal areas and Lumut as the port call.

This article was first published in the iProperty.com Malaysia July 2016 Magazine. Get your copy from selected news stands or view the magazine online for free at www.iproperty.com.my/magazine.  Better yet, order a discounted subscription by putting in your details in the form below!
 

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